As Market Struggled, Pacer’s Cash Cows ETF Delivered a Gain

As Market Struggled, Pacer’s Cash Cows ETF Delivered a Gain

Focused on free cash flow, COWZ assets soared nearly ninefold to $11.3 billion.

Reviewed by: Heather Bell
Edited by: Heather Bell

Great performances were hard to find last year, and while Pacer’s Cash Cows fund didn’t set the world on fire, it achieved a rare feat by not losing money. 

In a year when the SPDR S&P 500 ETF Trust (SPY) was down 18%, investors in the Pacer U.S. Cash Cows 100 ETF (COWZ) could breathe a little easy, as the fund was just ahead of breakeven with a 0.2% gain, according to data. While SPY had outflows of more than $12 billion, COWZ pulled in $9.3 billion last year; it started 2023 as a $1.3 billion fund and now has $11.3 billion. 

COWZ did this by focusing on large, public companies’ free cash flow, or money left over after a company pays operating expenses like rent, payroll and taxes. This money provides a return on investors’ funds, Pacer ETFs President Sean O’Hara said in an email to 

“It is especially significant in a rising rate and inflationary environment,” he wrote. O’Hara contrasted free cash flow with growth, which, he said, “gets hurt in a rising rate and high inflationary environment.” 

COWZ’s inflows helped to propel Pacer up to the 17th largest ETF issuer in the league tables from the No. 20 spot, where it had been sitting previously. The firm now has more than $21 billion in assets under management in its ETF lineup. 

Favorable Conditions 

While it may not focus specifically on the energy sector—which was among the few investment choices that rose last year—COWZ currently allocates roughly 33% of its portfolio to energy, while SPY allocates just over 5%. O’Hara said he believes the next $10 move in oil prices will be to the upside. Indeed, COWZ has four energy companies in its top 10 holdings, while SPY has only one.  

Based on MSCI data, COWZ’s biggest factor exposure is to value, at 0.84, while its second- argest exposure is to low size, at 0.53. It also offers a dividend yield of 2.17%, while SPY’s dividend yield stands at 1.56%.  

As of last week, the fund is up nearly 4% year to date, while SPY is trailing it by more than 200 basis points.  


Contact Heather Bell at [email protected] 

Heather Bell is a former managing editor of She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.